FIRST
DIVISION
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ANATALIA B. RAMOS,
Petitioner, - versus
- SPOUSES DOMINGO A. DIZON and EDNA Respondents. |
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G.R. No. 137247 Present: PANGANIBAN, C.J. Chairperson, YNARES-SANTIAGO, AUSTRIA-MARTINEZ, CALLEJO,
SR., and CHICO-NAZARIO,
JJ. Promulgated: |
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CHICO-NAZARIO, J.:
Before
Us is a Petition for Review on Certiorari of the Decision dated 16
October 1998[1] and the
Resolution dated 13 January 1999,[2]
both promulgated by the Court of Appeals in CA-G.R. CV No. 48544, affirming the
Decision dated 24 January 1995[3] of
the trial court in Civil Case No. 93-66439, a petition for registration of
consolidation of ownership over real property filed by herein petitioner.
In
the Petition filed before the Regional Trial Court (RTC), Manila, Branch 45,
and docketed as Civil Case No. 93-66439, petitioner alleged that respondents
are the owners of an undivided one-half portion of a parcel of land with an
area of about 89.35 square meters located in Limay
Street, Manuguit Subdivision, Tondo,
Manila, as evidenced by Transfer Certificate of Title (TCT) No. 172510 of the
Registry of Deeds of Manila; that on 1 February 1988, respondent Domingo
executed a Special Power of Attorney (SPA) authorizing Elpidio
Domingo to sell one-half portion of said parcel of land; that Elpidio, acting pursuant to the provisions of the SPA sold,
with a right to repurchase within five months, one-half of the land covered by
TCT No. 172510 to petitioner; and that respondent Domingo failed to redeem or
repurchase the disputed land within the five-month period provided for under
the Deed of Sale Under Pacto de Retro, thus, ownership over the subject land was consolidated in
petitioner.
Respondent
Domingo filed an Answer/Opposition[4] to
the Petition alleging that the SPA was executed for the purpose of enabling Elpidio to secure a loan of P150,000.00 by using
Domingo’s share in the land covered by TCT No. 172510 as security. The proceeds of the loan was supposed to be
used for the construction of a duplex residential house to be supervised by Elpidio. However, Elpidio obtained a loan of P350,000.00 and used a
substantial portion thereof for his personal advantage and benefit. As Elpidio had
exceeded his authority, Domingo claimed that he revoked the SPA through several
letters and by a formal notice of revocation sent by his counsel. As for the pacto
de retro sale, Domingo maintains that the same was simulated as Elpidio had already obtained a loan totaling P350,000.00
from petitioner as evidenced by a Real Estate Mortgage executed by the two of
them. In any case, he claims that the pacto de retro sale should be treated as an
equitable mortgage which cannot be enforced through a petition for
consolidation of ownership.
Elpidio likewise filed his Answer[5] to
the Petition but this was ordered stricken off the record by the trial court judge[6] as
it appeared that only respondent Domingo was the defendant and oppositor in the case before the court a quo.
The
Pre-Trial Order enumerated the parties’ respective exhibits, to wit:
PLAINTIFF’S EXHIBITS:
1. Exh. “A” - Transfer
Certificate of Title No. 172510 of the Registry of Deeds of Manila – admitted;
2. “ “B” - Special
Power of Attorney – admitted with the qualification that it was revoked later
on;
3. “ “C” - Deed
of Sale under Pacto de Retro – not admitted;
DEFENDANT’S EXHIBITS:
1. Exh. “1” - Promissory
Note dated P 150,000.00
executed by Elpidio Dizon
in favor of Anatalia Ramos – admitted the contents
subject to the presentation of the original document;
2. “ “2” - Promissory Note for P
150,000.00 dated
3. “ “3” - Deed
of Real Estate Mortgage executed by Elpidio R. Dizon, in favor of Anatalia
Ramos, Mortgagee, over the property covered by TCT No. 172510 – admitted;
4. “ “4” - Deed of Sale under Pacto de Retro, which was previously marked as Exh. “C” for the petitioner – admitted;
5. “ “4-A” - Second page of Exh.
“4”
6. “ “4-a-1” - Typewritten name of Domingo A. Dizon;
7. “ “5” - Special Power of Attorney;
8. “ “5-A” - Second page thereof;
9. “ “6” - Letter of Revocation of the Special
Power of Attorney (Reserved Exhibit);
10. “ “7” - Transcript of Stenographic Notes in
Civil Case No. 90-51838 (Reserved).[7]
During
the trial of the case, petitioner herself took the witness stand and testified[8]
that on
Petitioner
presented Elpidio as her second witness and he
essentially reiterated what petitioner had stated in her testimony. After the conclusion of Elpidio’s
testimony, petitioner offered into evidence Exhibits “A,” “B,” and “C,”[9] all of which were admitted by the trial
court. With this, petitioner rested her
case.
In
the same hearing, Elpidio was subjected to
cross-examination during which he declared that he owns the two-door
residential apartment built on respondent Domingo’s share in the land covered
by TCT No. 172510. The apartment building, however, encroaches
upon the other half portion of the said land which is owned by Elpidio’s brother, Ricardo Dizon. Sometime in March 1988, he offered to sell to
respondent Domingo, for
P550,000.00, the partially built two-door structure, as well as
Ricardo’s portion of the land on which a part of said building stood. Respondent Domingo agreed to Elpidio’s proposal such that he remitted to the latter the
amount of P207,000.00. Later, he
tried to collect from respondent Domingo the remainder of the purchase
amount. Respondent Domingo then
suggested that Elpidio secure a loan from the
Government Service Insurance System (GSIS) in order to complete the
construction of the two-door apartment.
Adopting respondent Domingo’s suggestion, Elpidio
secured a loan from petitioner in the initial amount of P150,000.00
evidenced by a promissory note dated P350,000.00 as shown by Exhibit “3-A” – a document entitled
“Increase in the Loan Value of Real Estate Mortgage dated P350,000.00 appearing in the pacto
de retro sale dated
It
was also revealed during Elpidio’s cross-examination
that respondent Domingo had previously filed a case for specific performance
and/or rescission against him, docketed as Civil Case No. 90-51838 and assigned to RTC
Manila, Branch XLI.
The
subject matter of said action was the purported contract of sale between
respondent Domingo and Elpidio involving the same
apartment building and a portion of Ricardo’s land. The trial court decided in favor of
respondent Domingo and disposed of the case in the following manner:
PREMISES CONSIDERED, judgment is hereby rendered -
1) declaring
the contract of sale entered into by and between plaintiff [respondent Domingo]
and defendant [Elpidio] over that undivided portion of
2)
ordering defendant to pay plaintiff as follows –
a)
the sum of P207,000.00 with interest thereon at the legal rate
from
b)
the sum of P350,000.00
with interest thereon at the rate of 3% a month from
c)
the sum of P50,000.00
as and by way of attorney’s fees and expenses of litigation.
The reliefs prayed for by
the Intervenor is hereby denied.
Costs against the defendant.[10]
Parenthetically,
the trial court in Civil Case No. 90-51838 made the following pronouncement
with respect to the transaction between petitioner and Elpidio:
Plaintiff’s evidence, however, which is not controverted by the defendant shows that he has paid
defendant the total sum of P207,000.00 in cash. In addition, defendant as attorney-in-fact of
plaintiff mortgaged plaintiff’s property to Anatalia
Ramos for the total sum of P350,000.00 which defendant
received and appropriated for his own personal benefit. To secure payment of the same, he sold
plaintiff’s property to Anatalia Ramos on a pacto de retro arrangement for the aforesaid sum. While the deed evidencing the sale was
denominated as a Deed of Sale under Pacto de Retro,
in view of the testimony given by the defendant, the court is inclined to
believe that the transaction was actually in the nature of an equitable
mortgage. Defendant testified that the
consideration of the sale is a loan.
Interest payment thereon has been agreed upon as 3% per month. The property remained in the possession of
defendant as attorney-in-fact of plaintiff.[11]
The decision in Civil Case No.
90-51838 was pending appeal at the time Elpidio took
the witness stand.[12]
On
Exhibits “6” - Decision
dated
“6-A” - Dispositive
portion thereto
“7” - TCT
No. 172510 – entry thereon
“7-A” - Registered
owners[13]
Also,
respondent Domingo’s counsel was given ten days to submit his formal offer of
evidence in writing and petitioner was given the same period of time to file
her comment or opposition thereto after which the case would be submitted for
resolution.[14]
The trial court, however, prior to the
submission of respondent Domingo’s formal offer of evidence, rendered a
Decision dated 24 January 1995 holding that the contract between petitioner and
Elpidio was actually one of equitable mortgage and
not a pacto de retro sale. According to the trial court –
As regards the first issue raised, Art. 1602, New Civil
Code hereinbelow quoted finds significant
application.
“Art. [1602]. The contract shall be presumed to be an
equitable mortgage, in any of the following case[s]:
(1) When the price of a sale
with right to repurchase is unusually inadequate;
(2) When the vendor remains in
possession as lessee or otherwise;
x x
x x
(6) In any other case where it
may be fairly inferred that the real intention of the parties is that the
transaction shall secure the payment of a debt or the performance of any other
obligation.”
The testimony of petitioner’s witness Elpidio
R. Dizon readily disclosed that prior to the
execution of the Deed of Sale under Pacto de Retro,
he had already obtained from Anatalia Ramos the total
amount of P350,000.00 evidenced by Promissory Notes and Real
Estate Mortgage. It may be fairly
inferred therefrom that the real intention of the
parties is that the transaction leading to execution of the Deed of Sale under Pacto de Retro shall secure the payment of Elpidio Dizon’s indebtedness
covered by the Promissory Notes and Real Estate Mortgage executed by in favor
of Anatalia Ramos.
It is also clearly shown that the price of the sale with right to
repurchase is unusually inadequate because the improvements erected on the lot
belonging to Domingo Dizon was even offered to the
latter for sale by Elpidio Dizon
for P550,000.00. Moreover, the
possession of the subject property has remained with the representative/agent
of the owner Domingo Dizon even long after the right
of redemption has expired. Under these
circumstances, the court cannot but conclude that the deed in question is in
reality a mortgage. With this
conclusion, the court, therefore, holds the petition as being improper and is
dismissed.[15]
It was only on
Petitioner thereafter filed a Notice
of Appeal[17]
and elevated the case before the Court of Appeals which affirmed the Decision
of the trial court in the Decision now assailed before us. The dispositive
portion of the Court of Appeals’ ruling provides:
WHEREFORE, finding no reversible error in the judgment
appealed from, the same is hereby AFFIRMED. With costs against the appellant.[18]
Petitioner’s Motion for
Reconsideration was likewise resolved in favor of herein respondents.[19] Hence, this Petition raising the following
issues for our consideration:
A. AFFIRMING
THE DECISION OF THE TRIAL COURT IN DISMISSING THE PETITION ALTHOUGH THE
(SPOUSES) DIZON DID NOT PRESENT ANY EVIDENCE.
B. AFFIRMING
THE TRIAL COURT WHEN IT TOOK COGNIZANCE OF THE SPOUSES DIZON’S EVIDENCE WHICH
WAS NOT FORMALLY OFFERED.
C. APPLYING
THE RELAXED RULE ENUNCIATED IN VDA. DE
ONATE vs. COURT OF APPEALS CONSIDERING THAT THE QUESTIONED EXHIBITS
WERE NOT PROPERLY IDENTIFIED AND WITHOUT ANY EXPLANATION OR RECITAL OF THE
CONTENTS THEREOF NOR ANY
D. AFFIRMING
THE DECISION OF THE TRIAL COURT WHEN IT TOOK COGNIZANCE OF THE SPOUSES DIZON’S
EVIDENCE WITHOUT, HOWEVER, ALLOWING RAMOS TO FILE HER COMMENT/OPPOSITION
THERETO.
E. AFFIRMING
THE DECISION OF THE TRIAL COURT THAT ELPIDIO DIZON ADMITTED HAVING SPENT FOR
HIS OWN PERSONAL ADVANTAGE AND BENEFIT THE AMOUNT OF P150,000.00.
F. COROLLARY
THERETO, FAILING TO RULE ON THE ISSUE AS TO THE VALIDITY OF THE SPA IN FAVOR OF
ELPIDIO DIZON.
G. HOLDING
THAT EXHIBITS ‘3’ AND ‘4’ REVEAL THE REAL INTENT OF THE PARTIES WAS TO HAVE THE
PROPERTY STAND AS SECURITY FOR THE DEBT, NOT
OF THE OWNER DOMINGO DIZO, BUT HIS NEPHEW AND ATTORNEY-IN-FACT \, ELPIDIO
DIZON.
H. HOLDING
THAT THE CONSIDERATION OF THE ‘
The Petition mainly raises the
questions of (1) whether the Court of Appeals erred in applying the rule
enunciated in the case of Vda. De Oñate v. Court of Appeals[21] pertaining to the admission and
consideration of evidence not formally offered, and (2) whether the Court of
Appeals erred in sustaining the trial court’s ruling that the contract between
petitioner and Elpidio was actually one of equitable
mortgage and not a pacto de retro sale.
Petitioner argues that it is axiomatic
that the court shall not consider evidence which has not been formally offered.[22] In this regard, they argue that Exhibits “1” to “7,”
inclusive of sub-markings, should not have been considered by the trial court
in its Decision considering that the same were not formally offered in
evidence. To support this assertion,
petitioner quotes from our following pronouncement in Interpacific Transit, Inc. v. Aviles[23]:
It is instructive at this
point to make a distinction between identification of documentary evidence and
its formal offer as an exhibit. The
first is done in the course of the trial and is accompanied by the marking of
the evidence as an exhibit. The second
is done only when the party rests its case and not before. The mere fact that a particular document is
identified and marked as an exhibit does not mean it will be or has been
offered as part of the evidence of the party.
The party may decide to formally offer it if it believes this will
advance its cause, and then again it may decide not to do so at all. In the latter event, the trial court is,
under Rule 132, Section 35 (sic) not authorized to consider it.
Similarly,
relied upon by petitioner was our holding in Chua v. Court of Appeals[24] where
we declared that:
The offer of evidence is necessary because it is the duty of the judge to rest his findings of facts and his judgment only and strictly upon the evidence offered by the parties at the trial. Such offer may be made orally or in writing sufficient to show that the party is ready and willing to submit the evidence to the court.
Petitioner
also assails the Court of Appeals for its alleged improper application of rule
enunciated in Vda. De Oñate, as
the requirements laid out in said case, relative to the admission of evidence
which was not formally offered, were not observed in the present case. Petitioner insists she was deprived of due
process as she no opportunity to file her objection to or comment on respondent
Domingo’s exhibits. Moreover, she was
denied the occasion to cross examine the witness regarding their exhibits.
We
are not convinced.
The
applicable provision of the Rules of Court on this matter is Sec. 34, Rule 132. It reads:
SEC. 34. Offer
of evidence. – The court shall consider no evidence which has not been
formally offered. The purpose for which
the evidence is offered must be specified.
The case of Vda. De Oñate, which was relied upon by the
Court of Appeals, reiterated our previous rulings in People v. Napat-a[25] and
People v. Mate[26] relative
to the admission and consideration of exhibits which were not formally offered
during the trial. We declared in Vda. De Oñate[27] that
–
From the foregoing provision, it is clear that for
evidence to be considered, the same must be formally offered. Corollarily, the
mere fact that a particular document to identified and marked as an exhibit does
not mean that is has already been offered as part of the evidence of a
party. In Interpacific Transit, Inc. v. Aviles [186 SCRA 385], we had the occasion to
make a distinction between identification of documentary evidence and its
formal offer as an exhibit. We said that
the first is done in the course of the trial and is accompanied by the marking
of the evidence as an exhibit while the second is done only when the party
rests its case and not before. A party,
therefore, may opt to formally offer his evidence if he believes that it will
advance his cause or not to do so at all.
In the event he chooses to do the latter, the trial court is not
authorized by the Rules to consider the same.
However, in People
v. Napat-a [179 SCRA 403] citing People v. Mate [103 SCRA 404], we
relaxed the foregoing rule and allowed evidence not formally offered to be
admitted and considered by the trial court provided the following
requirements are present, viz: first, the same must have been duly identified by
testimony duly recorded and, second, the same must have been incorporated in
the records of the case. (Underscoring
supplied.)
In
this case, we find and so rule that these requirements have been
satisfied. The exhibits in question were
presented and marked during the pre-trial of the case thus, they have been
incorporated into the records. Further, Elpidio
himself explained the contents of these exhibits when he was interrogated by
respondents’ counsel as follows:
Q: The initial amount you secured from Anatalia
Ramos was in the amount of P150,000.00 covered by this Promissory Note executed by
you, is it not?
A: I
cannot recall this Promissory Note but I was able to get a loan from her in the
amount of P150,000.00.
COURT:
You
examine the Promissory Note…
x x x
x
ATTY. RUIZ:
May we ask that original copy be shown to the witness,
Your Honor.
ATTY. DAVID:
Your Honor, this was the subject of the stipulation
during the pre-trial conference.
x x
x x
ATTY. DAVID:
Q: Is it correct that even before P350,000.00 covered by Promissory Notes and the Real
Estate Mortgage, is it not?
WITNESS:
A: Yes, sir.
x x x
x
ATTY. DAVID:
Q: Is it correct, therefore, Mr. Dizon,
that the total amount of P350,000.00 that you received all in all from Anatalia Ramos as of May 4, 1988 as evidenced by this
document Exhibit “3-A” is the same amount of P350,000.00 reflected in
the Pacto de Retro Sale dated August 10, 1988?
WITNESS:
A: Yes,
sir.
Q: Is it
not also a fact, Mr. Dizon, that the property subject
of this case, is likewise the subject of another case in Civil Case No. 90-51838
which is a complaint for Specific Performance and/or Rescission filed by
Domingo Dizon against you?
x x x
x
WITNESS:
A: It’s
on appeal.
COURT:
Yes,
there is a pending case but it’s now on appeal?
WITNESS:
Yes,
Your Honor.[28]
To
our mind, this exchange between Elpidio and
respondents’ counsel sufficiently described the contents of the above-mentioned
exhibits presented by respondents particularly the promissory notes and Deed of
Real Estate Mortgage.
Nor
can petitioner be heard to complain now that she was deprived of the
opportunity to cross-examine Elpidio. It bears stressing
that respondents’ Exhibits were presented during Elpidio’s
cross-examination and in the presence of petitioner’s counsel. In fact, Elpidio
was even subjected to an immediate re-direct examination by petitioner’s
counsel. Although the questions posed to
him at his re-direct examination pertained solely to Civil Case No. 90-51838
still, the opportunity was there for petitioner’s counsel to question him as
regards the other exhibits of respondents. The fact that petitioner’s lawyer
opted not to conduct a more thorough re-direct examination was his own
choice. Indeed, it may even be a part of
his tactic on this case but it certainly does not amount to a deprivation of
due process as now claimed by petitioner.
But
what further defeats petitioner’s cause on this issue is that respondents’
exhibits were marked and admitted during the pre-trial stage as shown by the
Pre-Trial Order quoted earlier. And so,
we reiterate here our ruling in Marmont Resort Hotel
Enterprises v. Guiang,[29]
to wit:
Both the trial and appellate courts held that the first
and second Memoranda of Agreement are not properly considered as forming part
of the record of this case, because neither
had been formally presented and offered in evidence at the trial of
Civil Case No. 2896-C. The record
shows, however, as noted earlier, that at the pre-trial conference held on 2
October 1980, both petitioner Marmont and respondent
spouses had agreed upon a stipulation of facts and issues recognizing the
existence of those same two (2) agreements.
Such stipulation of facts constitutes a judicial admission, the veracity
of which requires no further proof and which may be controverted
only upon a clear showing that such stipulation had been entered into through
“palpable mistake.” On this point,
Section 2, Rule 129 of the Revised Rules of Court provides:
“Section 2. Judicial Admissions.-Admission made by
the parties in the pleadings, or in the course of the trial or other
proceedings do not require proof and cannot
be contradicted unless previously shown to have been made through palpable
mistake.”
There has been no showing
and respondent spouses do not claim that “palpable mistake” had intervened
here, in respect of the formulation of the facts stipulated by the parties at
the pre-trial conference. Absent any
such showing, that stipulation of facts is incontrovertible, and may be relied
upon by the courts. Respondent spouses
are estopped from raising as an issue in this case
the existence and admissibility in evidence of both the first and second
Memoranda of Agreement which, having been marked as exhibits during pre-trial,
properly form part of the record of this case, event though not formally
offered in evidence after trial. (Emphasis supplied.)
Therefore,
notwithstanding the fact that respondents’ exhibits were not formally offered
prior to the rendition of the Decision in Civil Case No. 93-66439 by the court a quo, the trial court judge committed
no error when he admitted and considered them in the resolution of the
case. After all, the pre-trial forms
part of the proceedings and matters dealt with therein may not be brushed aside
in the process of decision making.
Otherwise, the real essence of compulsory pre-trial would be
inconsequential and worthless.[30]
Anent
the second issue, petitioner maintains that the SPA authorized Elpidio to sell or negotiate the sale of the property in
dispute. Although said authority was
later on revoked, it was nevertheless subsisting when she and Elpidio agreed on the pacto
de retro sale or long after the amount of P350,000.00 was received
and consumed for the construction of the two-door apartment. Petitioner further assails the Court of
Appeals’ conclusion that the selling price of the disputed property was
unusually inadequate as this finding is not supported by any proof.
We
reject petitioner’s submission.
Under
Article 1602 of the Civil Code, the contract of sale will be presumed to be an
equitable mortgage in any of the following cases:
(1)
When the price of
a sale with right to repurchase is unusually inadequate;
(2)
When the vendor
remains in possession as lessee or otherwise;
(3)
When upon or
after the expiration of the right to repurchase another instrument extending
the period of redemption or granting a new period is executed;
(4)
When the
purchaser retains for himself a part of the purchase price;
(5)
When the vendor
binds himself to pay the taxes on the things sold;
(6)
In any other case
where it may be fairly inferred that the real intention of the parties is that
the transaction shall secure the payment of a debt or the performance of any
other obligation.
In the case at bar, it was disclosed
by Elpidio that up to the time when he took the
witness stand on
Moreover, it does not escape our attention
that according to Elpidio, the amount of P350,000.00 stated in the Deed of Sale Under Pacto de Retro is the same amount as that
covered by the Real Estate Mortgage and the two promissory notes signed by him.
There was therefore no separate consideration received by him from the
execution of the pacto de retro sale
apart from the proceeds of the earlier loans he obtained from petitioner. This undoubtedly gives credence to
respondents’ position that the pacto de
retro sale was but a security for the loans extended by petitioner.
WHEREFORE,
premises considered, the present Petition is DENIED and the Court of
Appeals’ Decision dated
SO ORDERED.
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MINITA V. CHICO-NAZARIOAssociate Justice |
WE
CONCUR:
Chief Justice
Chairperson
Associate Justice
Associate
Justice
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ROMEO J.
CALLEJO, SR. Associate Justice |
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Pursuant to Article VIII,
Section 13 of the Constitution, it is hereby certified that the conclusions in
the above Decision were reached in consultation before the case was assigned to
the writer of the opinion of the Court’s Division.
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ARTEMIO V.
PANGANIBAN Chief Justice |
[1] Penned by Associate Justice
Portia Aliño-Hormachuelos with Associate Justices
Buenaventura J. Guerrero and Presbitero J, Velasco,
Jr. (now a member of this Court), concurring; rollo, pp. 27-36.
[2] Rollo, pp. 46-47.
[3] Penned by Judge Benito C. Se,
Jr.;
[4]
[5]
[6] Records, p. 97.
[7]
[8] TSN,
[9]
[10] Penned by Judge Domingo D. Panis; Records, p. 165.
[11] Records, pp. 163-164.
[12] TSN,
[13] Records, p. 137.
[14]
[15]
[16]
[17]
[18] Rollo,
p. 36.
[19]
[20] Rollo,
pp. 6-7.
[21] G.R. No. 116149,
[22] Citing RULES OF COURT, Rule 132, Section 34.
[23] G.R. No. 86062,
[24] G.R. No. 88383, 19 February 1992, 206 SCRA 339, 346 citing Llaban v. Catalan v. Court of Appeals, G.R. No. 63226, 20 December 1991, 204 SCRA 887; United States v. Solaña, 33 Phil. 582 (1916); Dayrit v. Gonzalez, 7 Phil. 182 (1906).
[25] G.R. No. 84951,
[26] G.R. No. L-34754,
[27] Vda. de Oñote v. Court of Appeals, supra
note 21 at 286-287.
[28] TSN,
[29] G.R. No. L-79734,
[30] Antonio Lim Tanhu
v. Ramolete,
G.R. No. L-40098,
[31] De
Guzman, Jr. v. Court of Appeals, G.R. No. L-46935,